In the years following World War II, the world was seemingly obsessed with a fundamental question: What role should government play in the economy? Socialism became the great experiment of the post-war period, with nations such as the Soviet Union embracing the idea whole heartedly and nations such as the United States outright rejecting it. Still, Capitalists too were now in a great divide. Should markets be free? Should governments intervene in times of economic instability in order to create jobs? Eventually, these Capitalists seemed to settle the issue, thus beginning the great Keynesian Revolution that would shape economics for decades, but not all Capitalists were quite so sold on the ideas that became prevalent in the latter part of
…show more content…
One of these economists was Sir John Clapham, who attended the first Mont Pelerin Society meeting in 1947. Clapham himself, like Keynes, was an associate of King’s College in Cambridge, but perhaps the most notorious allegiance Clapham had was to the King. He was, you see, the King’s economic historian. It seems that Clapham and Keynes, even if they may have been economic rivals, knew each other well. Clapham was a devoted economic historian, dying on his way to a meeting in London, while in mid-sentence, aboard a train.
Another quite prominent member of the society was John Jewkes. A professor at Cambridge, Jewkes published his work “Ordeal By Planning” in 1948. The book postulated that the misfortune of Great Britain in recent years could be traced to the election of Atlee’s government and the handing of economic power to the state. He further suggested that it was up to the British people to take this power back in order to allow economic conditions to flourish once …show more content…
He fought in World War I before returning home to study at the University of Zurich. He became a prominent economist, eventually going on to spend most of his academic life at the London School of Economics. He toured Britain and the United States in his day and died in 1992 in Germany.
In Hayek’s “Road To Serfdom” in 1944, he said this:
“The more the state "plans" the more difficult planning becomes for the individual.”
Perhaps among the biggest differences in Austrian Economics and Keynesian Economics is the lack of focus Austrian Economics places on aggregates. Keynesian economics, and modern economic theory as a whole, tends to focus a significant amount of attention on aggregates and macroeconomics. Any modern economist can tell you the equation for Aggregate Demand – Y = C + I + G. Hayek argued that too much focus is placed on aggregates and averages in the works of Keynes and not enough focus is placed on individual price changes in the market.
Keynes suggested that, as Consumption rises, so does Investment. If, say, consumption rises in the Peanut Industry, the peanut companies will be forced to seek out more investments to fund their operation. Hayek argued that, after a certain point, investment will stop increasing. In fact, investment will decrease. This is known as the Concertina
One of these economists was Sir John Clapham, who attended the first Mont Pelerin Society meeting in 1947. Clapham himself, like Keynes, was an associate of King’s College in Cambridge, but perhaps the most notorious allegiance Clapham had was to the King. He was, you see, the King’s economic historian. It seems that Clapham and Keynes, even if they may have been economic rivals, knew each other well. Clapham was a devoted economic historian, dying on his way to a meeting in London, while in mid-sentence, aboard a train.
Another quite prominent member of the society was John Jewkes. A professor at Cambridge, Jewkes published his work “Ordeal By Planning” in 1948. The book postulated that the misfortune of Great Britain in recent years could be traced to the election of Atlee’s government and the handing of economic power to the state. He further suggested that it was up to the British people to take this power back in order to allow economic conditions to flourish once …show more content…
He fought in World War I before returning home to study at the University of Zurich. He became a prominent economist, eventually going on to spend most of his academic life at the London School of Economics. He toured Britain and the United States in his day and died in 1992 in Germany.
In Hayek’s “Road To Serfdom” in 1944, he said this:
“The more the state "plans" the more difficult planning becomes for the individual.”
Perhaps among the biggest differences in Austrian Economics and Keynesian Economics is the lack of focus Austrian Economics places on aggregates. Keynesian economics, and modern economic theory as a whole, tends to focus a significant amount of attention on aggregates and macroeconomics. Any modern economist can tell you the equation for Aggregate Demand – Y = C + I + G. Hayek argued that too much focus is placed on aggregates and averages in the works of Keynes and not enough focus is placed on individual price changes in the market.
Keynes suggested that, as Consumption rises, so does Investment. If, say, consumption rises in the Peanut Industry, the peanut companies will be forced to seek out more investments to fund their operation. Hayek argued that, after a certain point, investment will stop increasing. In fact, investment will decrease. This is known as the Concertina